Advanced Engineering Economy and Cost Analysis

Description

ALFAISAL UNIVERSITY ∙ COLLEGE OF ENGINEERING ∙ INDUSTRIAL ENGINEERING

Course Description:

The content of the course is designed to introduce the fundamental concepts of engineering economics, including monetary values over time, financial analysis of projects, depreciation analysis, replacement analysis taxation, and life-cycle cost analysis

Major Topics:

• Cost Terminology

• Time Value of Money

• Evaluating a single project Comparison and Selection among Alternatives

• Depreciation and income taxes

• Replacement analysis

• Breakeven and sensitivity analysis

• Decision Making considering Multiattributes

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Specific Course Learning Outcomes:

• Formulate and solve time value of money problems.

• Determine and obtain suitable data to solve economic problems using appropriate techniques.

• Evaluate multiple alternatives to determine the optimum one.

• Use relevant formula for financial analyses.

• Understand the importance of making appropriate economic decisions.

• Recognize the impact of engineering economic decisions in a global and societal context.

By the end of this course, the learner will be able to:

• Understand Fundamentals of Engineering Economics.

• Understand the Time Value of Money.

• Understand Importance of Engineering Economics Study.

• Understand The Role Engineering Economic in decision making.

• How to draw and read Cash Flow Diagrams (CFD).

• Understand interest rate (IR), Rate Of Return (ROR) Return on Investment (ROI).

• Differentiate between simple and compound interest amounts.

• Understand The meaning of the present, future, and annual flows.

• Derive the relationships between the present, future, and annual flows.

• Calculate factors.

• Extract factors from tables.

• Use single amounts factors - compound amount (F/P) and present worth (P/F) factor.

• Use uniform series factors - present worth (P/A) and capital recovery (A/P) factors.

• Use uniform series factors - compound amount (F/A) and sinking fund (A/F) factors.

• Use arithmetic gradients factors - compound (P/G) and uniform annual series (A/G) factors.

• Calculate (F/G) and (G/F) factors.

• Understand the relations between factors.

• Perform Present Worth Analysis PW.

• Perform Future Worth Analysis FW.

• Perform Annual Worth Analysis AW.

• Study investment opportunities.

• Compare between investment opportunities with the same lives.

• Compare between investment opportunities with different lives.

• Performing replacement studies for a specified study period.

• Performing replacement studies for unspecified study period.

• Calculate depreciation using Straight Line Method.

• Calculate depreciation using Activity Method.

• Calculate depreciation using Some of the Years Digits Method.

• Calculate Costs.

• Calculate Profits.

• Calculate fair Taxes.

• Perform breakeven analysis.

• Calculate fixed costs.

• Calculate the variable costs.

• Calculate total revenue.

• Calculate the Break-Even Quantity.

• Differentiate between nominal and Effective interest rate.

• Determine the payment period (PP) and compounding period (CP) for equivalence computations.

• Determine the effective interest rate for any stated time period.

• Determine the payment period (PP) and compounding period (CP).

• Calculate the effective interest rate.

• Calculate the equivalence value when PP ≥ CP

• Calculate the equivalence value when CP ≥ PP

• Calculate the equivalence value when PP = CP.

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